Continuing with our "earnings season highlights" coverage, LRAD Corp. (LRAD-NASDAQ) has reported its fiscal second quarter 2013 financials, which entail results for the Company’s three- and six-month period ended March 31, 2013.
In addition to the below discussion, detailed information from Crystal Research Associates about LRAD’s business, product lines, strategies, market opportunities, and competition is available here, and the Company’s SEC filings can be accessed here.
The Company’s Long Range Acoustic Device® (LRAD®) technology uses advanced sound reproduction technologies and novel acoustic materials to broadcast authoritative and highly intelligible instructions, warnings, alarms, and other sounds over several miles. LRAD® improves upon traditional speaker systems and megaphones by directing sound only where needed. Similar to a spotlight, which produces an intense beam of targeted light, each LRAD® system delivers a focused, directional audio broadcast. The beam width, frequency range, and maximum continuous output of LRAD® devices can be adjusted to target individuals, small groups, and large crowds at various ranges. LRAD Corp.’s versatile product portfolio has a range of applications, including public safety, law enforcement, homeland and international security, private and commercial security, maritime security, and wildlife and asset protection.
LRAD’s fiscal year ends September 30th, making the three months ended March 31st the Company’s second quarter. For the quarter, LRAD reported revenue from product sales, contracts, and other sources of $3.2 million, up from $2.4 million in the year-ago period. It is important to note that LRAD’s quarterly revenue is subject to fluctuations due to the budgetary cycles of its customer base, which largely consists of domestic and foreign government, military, law enforcement, and other agencies.
Similarly, LRAD’s revenues for the six-month period ended March 31, 2013, were $6.2 million versus $6 million for the first half of fiscal 2012.
For the second quarter fiscal 2013, LRAD reported a net loss of $459,000, or ($0.01) per share, versus a net loss of $292,000, or ($0.01) per share, for the second quarter fiscal 2012. For the first half of 2013, net loss was $560,000, or ($0.02) per share, versus a net income of $22,000, or $0 per share, for the six months ended March 31, 2012. For all terms, the increase in net loss to date in FY 2013 results from higher operating expenses due to increases in legal and other professional fees associated with a recent lawsuit and threatened proxy contest, non-cash share-based compensation expense, and research and development costs, partially offset by favorable commission expense, according to LRAD’s May 8, 2013, press release.
While LRAD has recently encountered economic and defense budget headwinds as a result of sequestration and spending uncertainty, the Company has worked to mitigate these effects by expanding its acoustic hailing device (AHD) markets, launching additional LRAD® systems, pursuing a pipeline of both domestic and international business opportunities, closely controlling its balance sheet and expenses, and moving into new headquarters with increased and improved manufacturing space, among other benefits. LRAD reports that it is starting to see funds being released for acoustic hailing device (AHD) military purchases in the U.S. and anticipates strong military and international sales for the second half of the fiscal year.
As of March 31, 2013, LRAD held cash and cash equivalents of $15.8 million.
Yesterday we published a Quarterly Update on LRAD Corp. (LRAD-NASDAQ), a California-based company marketing advanced sound technologies in the form of acoustic hailing devices (AHDs) capable of broadcasting intelligible speech, alarms, and other sounds at great distances. LRAD Corp. added to its already comprehensive portfolio with the launch of two new products in 2012, which are allowing the Company to pursue greater market opportunities in 2013. With annual FY 2012 sales of $14.8 million, LRAD Corp. has now achieved three consecutive years of profitability.
Highlights from the recently released Update are included below. To read the full 12-page report, please visit our Corporate Profile page on LRAD Corp.
Fiscal year 2012 (ended September 30, 2012) was the third consecutive year of profitability for LRAD Corp. Despite an uncertain climate for defense investments and federal budgets over the past year, LRAD Corp. recorded FY 2012 revenues of $14.8 million, which included inaugural sales of the LRAD 2000X™ AHD for large security applications and the omnidirectional LRAD 360X™ for mass notifications and emergency communications. Previously, in FY 2011, the Company recorded revenues of $26.5 million, which included a one-time $12.1 million foreign government order.
During FY 2012, LRAD Corp.’s U.S. revenues expanded by 19% over FY 2011, and the Company increased working capital by 12%.
A September 2012 order from the U.S. Air National Guard for LRAD 100X™ systems marked the use of LRAD® systems by every major force of the U.S. Department of Defense.
During fiscal 2013, LRAD Corp. is focusing on its international business while it continues to pursue domestic law enforcement and military sales opportunities. As well, continuing with the Company’s strategy of developing new AHD markets, LRAD Corp. plans to expand into the emergency/warning mass notification market with its recently released omnidirectional LRAD 360X™ systems during 2013.
As of September 30, 2012, LRAD Corp. had cash and cash equivalents of nearly $13.9 million.
Additionally, on the heels of this Update, LRAD announced this morning that it has received a $1.4 million LRAD-RX systems order from an Asian company for commercial maritime shipping security installations. The LRAD-RX is the only remotely controlled AHD to have passed rigorous U.S. Navy testing and to be deployed on U.S. Navy vessels.
We just released our second business update on LRAD Corp. (LRAD-NASDAQ), a company developing and marketing acoustic hailing devices (AHD) that support the delivery and intelligibility of audio broadcasts over long ranges.
The Company’s Long Range Acoustic Device® (LRAD®) technology uses advanced sound reproduction technologies and novel acoustic materials to broadcast authoritative and highly intelligible instructions, warnings, alarms, and other sounds over several miles. LRAD® improves upon traditional speaker systems and megaphones by directing sound only where needed. Similar to a spotlight, which produces an intense beam of targeted light, each LRAD® system delivers a focused, directional audio broadcast. The beam width, frequency range, and maximum continuous output of LRAD® devices can be adjusted to target individuals, small groups, and large crowds at various ranges. LRAD Corp.’s versatile product portfolio has a range of applications, including public safety, law enforcement, military, commercial security, and wildlife and asset protection.
Highlights from our latest update, which is available here, include the following:
- Greater demand from the U.S. military for LRAD's products leading to higher year-over-year quarterly revenues
- A transition to new corporate offices in a new facility with greater manufacturing capacity
- Expanded product line to include the LRAD 360X™, which provides uniform 360-degree broadcasts in support of effectively delivering mass notifications and emergency warnings, and which has already been shipped for earthquake and tsunami warnings
- Details of the Company's key law enforcement and public safety markets
- Expanded Board of Directors
- New financials
Yesterday, LRAD Corp. (LRAD-NASDAQ), a supplier of advanced sound technologies for commercial, military, and government markets worldwide, reported that it received a $1.9 million order from the U.S. Army Reserves for its LRAD 500X™ and LRAD 100X™ Long Range Acoustic Hailing Devices. The company has long provided the Army with LRAD systems that can be vehicle-mounted to broadcast highly intelligible warnings and commands to soldiers and civilians at long distances.
Following this announcement, the company released its financial results for the fiscal third quarter 2012, which ended June 30, 2012.
LRAD reported the following key items for the quarter (comparisons to the fiscal Q3 2011):
Revenues of $3.2 million, a 33% increase over Q3 2011 due to an increase in orders from the U.S. Army
Gross profit of $1.6 million, or 50% of revenues, versus $905,000, or 38% of revenues, for Q3 2011
Net income of $200,000, or $0.01 per diluted share, versus a net loss of $684,000, or ($0.02) per share, for Q3 2011
Summarized below are highlights of the company's nine-month (year-to-date) financials for 2012 thus far:
Revenues of $9.2 million, a decrease from $20.1 million for the nine months ended June 30, 2011, which had included a $12.1 million foreign military order
Net income of $222,000, or $0.01 per diluted share, that declined from $4.7 million, or $0.15 per diluted share, for the year-ago term due to a decrease in revenues and gross margin partially offset by decreased operating expense
Positive cash flow of $490,000 for the nine months ended June 30, 2012
Cash and cash equivalents of $14.4 million at June 30, 2012
The profitable LRAD Corp. also anticipated a favorable finish to 2012, as the company's move into a new facility with greater manufacturing capacity has recently been completed, which may allow LRAD to capitalize on its expected U.S. military and international orders for the year.
For a greater explanation of LRAD's business, please consult our Quarterly Update on the company, published June 20, 2012. As well, LRAD's management is scheduled to discuss the company's fiscal Q3 2012 business and financial results on a conference call today, August 8, 2012, at 4:30 p.m. Eastern Time.
On June 21, 2012, Crystal Research issued a Quarterly Update on LRAD Corp. (LRAD-NASDAQ), a company developing and marketing acoustic hailing devices (AHD) that support the delivery and intelligibility of audio broadcasts over long ranges. The 12-page Update is available here.
- During the first six months of LRAD Corp.’s 2012 fiscal year (ended March 31), the Company reported revenues of $6 million versus $17.7 million for the corresponding 2011 timeframe (which included a $12.1 foreign military order). Law enforcement and public safety initiatives represented a significant portion of the Company’s sales during the first half FY 2012, helping the Company achieve breakeven results for the six-month period despite lower military sales.
- LRAD® systems have been used by law enforcement for various major public affairs, such as for the 2012 NATO summit in Chicago, and will be used for the upcoming 2012 Summer Olympics in London. These events have led to various publicity features for the Company’s systems, including the Tonight Show with Jay Leno, local news stations in major cities (e.g., Los Angeles and Chicago), as well as an AOL Digital Justice webisode.
- LRAD Corp. expects military sales to gain momentum in the second half as the U.S. government nears the end of its fiscal year (Sept. 30). Recently, the U.S. military placed orders for roughly $1.5 million in LRAD® systems and support equipment. The Company has completed and submitted its bid to the U.S. Navy’s Request for Proposal (RFP) for between 4 each and 1,300 small, medium, and large acoustic hailing devices over the next five years.
- LRAD Corp. continues to penetrate commercial security and wildlife and asset protection markets globally. In May 2012, the Company received a $1.7 million order for Asian maritime security.
- LRAD Corp. has also expanded its product line to include the LRAD 360X, which provides uniform 360-degree broadcasts in support of effectively delivering mass notifications and emergency warnings.
- As of March 31, 2012, LRAD Corp. had cash and cash equivalents of $13.9 million.
Greater information about LRAD Corp. and its product portfolio is provided in Crystal Research Associates' 64-page Executive Informational Overview (EIO) published February 13, 2012.
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The Chicago Police Department has announced that it will use LRAD Corp.'s (LRAD-NASDAQ) long-range acoustic devices (LRAD) to communicate to crowds during the 2012 NATO Summit in Chicago. This is one of many safety and security measures the city has put in place in preparation for the event, which begins Sunday, May 20, 2012. Various protests and demonstrations are expected leading up to and throughout the Summit.
The Chicago Police Department sought improved techniques to ensure that orders can be effectively delivered to crowds and protestors. Just this morning, a federal court judge gave preliminary approval to a $6 million+ settlement to protestors who were arrested by Chicago police after police failed to give clear orders to protestors during an anti-war march nearly a decade ago. Chicago Police have purchased two LRAD units to clearly communicate messages to crowds at the upcoming Summit.
LRAD Corp.'s products have also been used for public safety at the G20 Summit in Pittsburgh during 2009 and the Occupy Wall Street movement in New York and Los Angeles in late 2011.
Long Range Acoustic Device® (LRAD®) Platform
The LRAD® platform uses directionality and focused acoustic output to support communication over distances of 10 meters to 8,900 meters. Similar to a spotlight, which produces an intense beam of light directly onto a subject, each LRAD® system delivers a focused directional audio broadcast. The beam width, frequency range, and maximum continuous output of LRAD® devices ensures intelligible communication over both distance and loud background noise, and can be adjusted to target individuals, small groups, or large crowds. By placing sound only where needed, LRAD® improves upon traditional speaker systems and adds novel sound applications that conventional technologies have been unable to achieve.
The Company’s product line meets a broad range of requirements for communicating to and deterring potential threats, from the hand-held LRAD 100X™ to the permanently installed LRAD 2000X™. To the Company’s knowledge, each LRAD® model presents the loudest and most intelligible AHD in its size and weight category.
Each LRAD® device is capable of delivering live voice broadcasts through an attached microphone, and both voice broadcasts and deterrent tones using a hardened MP3 player. Messages can be recorded and saved for later use in multiple languages, which can improve communication in situations where a language barrier is present. Moreover, various bird calls and predator tones can be recorded to prevent wildlife from approaching a potentially dangerous area (e.g., wind farms, airports, or waste areas).
LRAD® can be combined with a number of features (e.g., radar, cameras) that further improve communication and interaction. There is also an option to operate the device remotely across an Internet Protocol (IP)-accessible network. Whereas traditional security and sensor networks allow a user to view a location in real-time, LRAD® enables a first responder capability—allowing the user to communicate to an individual in real time. For example, in a security scenario where LRAD® is operated remotely, command and control center officials could communicate directly to an individual before they breach a secure perimeter, which could alter the individual’s behavior and potentially prevent that person from entering the area. Moreover, LRAD® can be deployed in nearly any type of environment. The rugged, lightweight, and waterproof casing of LRAD® meets the stringent requirements of the U.S. military—ensuring that the device can be operated in harsh environments while also remaining portable. Figure 3 demonstrates the durability of an LRAD® system.
As of February 2012, LRAD® systems had been deployed in approximately 45 countries across North America, Europe, Asia, Africa, Europe, and Australia.
Additional information about the Company's products and technologies is provided in Crystal Research Associates' 64-page Executive Informational Overview® on LRAD Corp.
May 15, 2012 (Marketwire), SAN DIEGO, CA--
LRAD Corp. (LRAD-NASDAQ) announced it has received a $1.7 million LRAD-RX systems order for Asian maritime security. Deliveries on the order are scheduled to begin this quarter and continue into the Company's 2013 fiscal year.
"This order further confirms that our LRAD-RX systems are becoming an important component in maritime escalation of force (EOF) protocols to help combat terrorist and piracy threats," stated Tom Brown, president and CEO of LRAD Corporation. "When a suspicious vessel fails or refuses to respond to radio calls, the LRAD-RX initiates the EOF through powerful voice broadcasts and deterrent tones. By unequivocally determining the intent of an approaching threat, the LRAD-RX assists armed security forces to avoid accidental shooting incidents while providing them time and distance to scale their response and make life and death decisions."
The Company's proprietary LRAD-RX (shown below) features a camera, high intensity searchlight (optional), a robust, IP-addressable full pan and tilt drive for precise aiming and tracking, and can be integrated with radar to provide automated vessel alerts. The LRAD-RX broadcasts highly intelligible, hails, warnings and instructions over distances up to 2 miles. Through the use of focused, multi-language voice commands and deterrent tones, the LRAD-RX creates increased standoff zones, determines intent, supports peaceful conflict resolution, and potentially prevents the use of deadly force.
"Our LRAD® systems have proven to be highly effective for maritime security," Brown added. "To date, LRAD systems have helped to prevent accidental shooting incidents and to peacefully resolve hundreds of maritime EOF situations throughout the world."
About LRAD Corporation
LRAD Corp. is using long-range communication to resolve uncertain situations peacefully and save lives on both sides of its proprietary Long Range Acoustic Device®. Thousands of LRAD® systems are in service around the world in diverse applications including fixed and mobile military deployments, maritime security, critical infrastructure and perimeter security, commercial security, border and port security, law enforcement and emergency responder communications, asset protection, and wildlife preservation and control.
For more information about the Company and its LRAD systems, please visit http://www.crystalra.com/research-library/lrad-corp/.
Crystal Research has initiated coverage on LRAD Corp. (LRAD-NASDAQ) with the publication of a 64-page Executive Informational Overview® available here.
LRAD Corp. (“the Company”) develops and markets long-range acoustic hailing devices (AHDs) that are designed to improve the delivery and intelligibility of audio broadcasts. The Company’s Long Range Acoustic Device® (LRAD®) technology uses advanced sound reproduction technologies and novel acoustic materials to broadcast authoritative and highly intelligible instructions, warnings, alarms, and other sounds over several miles.
LRAD® improves upon traditional speaker systems and megaphones by directing sound only where needed. Similar to a spotlight, which produces an intense beam of targeted light, each LRAD® system delivers a focused, directional audio broadcast. The beam width, frequency range, and maximum continuous output of LRAD® devices can be adjusted to target individuals, small groups, and large crowds at various ranges.
LRAD Corp.’s versatile product portfolio has a broad range of applications, including military, wildlife and asset protection, public safety/law enforcement, and commercial security.
At present, LRAD Corp. believes that its largest market opportunity is with the U.S. military. The Company is working with Kongsberg Gruppen ASA (KOG-OSE)—a global military and defense contractor—to develop Common Remotely Operated Weapon Stations (CROWS) that provide soldiers escalation of force options and the ability to communicate to targets (via LRAD®) from within the safety of their armored vehicles.
Kongsberg currently supplies its PROTECTOR CROWS to the U.S. Army under a five-year framework agreement. As the agreement comes to a close, the Army has disclosed that the upcoming CROWS III contract is valued at $970 million (~3,000 units). LRAD Corp. and Kongsberg are working on a submission for the upcoming CROWS III contract and seek to obtain an initial order for field testing.
As well, the U.S. Army has issued a public Request for Information (RFI) regarding 6,350 AHDs. LRAD Corp. is actively pursuing this opportunity and is hopeful that the process could advance to the formal Request for Proposal (RFP) stage in 2012.
Wildlife and Asset Preservation
LRAD® technology is proving to be effective at preserving both wildlife and critical assets at airports, air bases, harbors, wind farms, tailing ponds, and other facilities. The Company reports that its devices have been installed in multiple mining operations for over two years and have reduced bird deaths from thousands annually to less than 20 per year. LRAD® may also benefit solar farms, nuclear power facilities, agricultural operations, fisheries, and other industries that have wildlife preservation concerns. The video below provides a demonstration of the ability of LRAD to deter wildlife from control zones.
The Company aims to capitalize on successful trials and opening orders to date to further penetrate the wildlife and asset preservation market, particularly airports and clean/alternative energy applications (e.g., wind farms). From 1990 to 2009, bird strikes resulted in nearly 425,000 hours of aircraft downtime and roughly $375 million in monetary losses (Source: the Federal Aviation Administration). The U.S. Air Force has reported that it spends approximately $35 million annually to repair aircraft damage caused by bird strikes. Moreover, wind turbines cause roughly 440,000 bird deaths each year in the U.S. (Source: the U.S. Fish and Wildlife Service).
Public Safety/Law Enforcement
In public safety, LRAD® systems can be an effective mass communications tool to quickly issue warnings, instructions, and directions during natural disasters, terrorist attacks, or other emergencies, even in areas where power and communication has been disrupted. In 2010, mass notification system sales in the U.S. alone exceeded $1.2 billion (Source: IMS Research).
Additionally, LRAD® can be a critical part of the layered defense/escalation of force strategy for law enforcement and government agencies trying to control protests, riots, or other large crowd scenarios. LRAD Corp. has received substantial media coverage after its products were used for public safety in widely publicized events such as the G20 Summit in Pittsburgh during 2009 and the Occupy Wall Street movement in New York and Los Angeles in late 2011.
The Company’s LRAD® products can help secure perimeters and protect infrastructure both on land and at sea. In the maritime setting, LRAD® technology has been used to secure ports and waterfront perimeters as well as to protect personal vessels and cruises ships against pirate attacks and other threats. The International Maritime Bureau (IMB) received reports of 439 pirate attacks globally during 2011, with 113 vessels fired upon, 176 ships boarded, 45 vessels hijacked, over 800 crew members taken hostage, and eight people killed. To date, LRAD® products have been used by the U.S. Navy, the South Korean Navy, and luxury cruise liners, among others, to successfully repel pirate attacks.
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